So it appears Mercury Marine is staying put in Fond Du Lac after the union representing workers at Mercury Marine had a re-vote and voted to approve a revised contract that included even deeper concessions than those included in the union’s most recent labor contract with Mercury Marine. After union members originally voted against the concessions, some conservatives were quick to excoriate union members for “voting to kill their jobs” while simultaneously attacking Gov. Jim Doyle for not doing more to keep Mercury Marine in Fond Du Lac, and what I’m wondering is if those same conservatives who wanted to see more done to keep Mercury Marine in Fond Du Lac are happy with the corporate welfare being doled out to Mercury Marine, in the form of incentives funded by a tax increase:
A package of incentives, part of which would be funded by a half-cent county sales tax, is being offered to Mercury Marine Inc., officials said Tuesday.
So here’s a question for my conservative readers: those higher taxes in Fond Du Lac County are definitely a good thing, right?
I can agree with half-cent to keep their jobs more would be lost without the tax
So in other words, tax increases are perfectly okay, as long as they’re for something you agree with.
Got it.
Looks like just a well-timed excuse for tacking on another new tax. I would first have to ask that with this incentive, is there a corresponding cut they could have made to prevent resorting to a new tax? But then people like you would have screamed that something gravely important (because everything related to government MUST be important) was lost at the expense of corporate welfare.
The story says “a portion of the sales tax would be used to pay for the loan.” Where’s the rest of it going? I bet the tax doesn’t end after it is paid either. Rarely does anything in goverment end.
The real issue is the business tax structure of our state. If that would be in better shape they wouldn’t have to resort to individual incentives like this. This is just a desperate move that becomes ‘necessary’ because we don’t deal with a host of other problems: right to work state, high taxes, inconsistent regulations, etc.
So no, I don’t think doing more to keep the company here has to mean a new tax burden.
The number of people employed by MM keeps rising. First it was 500, then 850, now its 1,850 people employed in Fond du Lac county in this article. What is the truth?
Secondly, I regret hearing that it is acceptable to raise taxes in the county on everyone else to keep some people employed. Tax incentives were not enough apparently and so the county had to give the company money to keep them. What cost is victory over Oklahoma? Soon we will learn all.
The county has 100,000 people who will be paying 1/2 percent on sales but the labor pool is 57,000 people. They are the ones who will see the impact of keeping ‘X’ (whatever the number is) jobs in the county. A Republican County (62% for Bush) in 2004 mind you that says Big Government is bad for you.
Whatever the final cost per person (or per worker) is in Fond Du Lac County, I am sure that outright payments to a company should not be repeated in any other state negotiations with businesses. Who can afford it? It will be a decade before the recreation industry will make its comeback.
Being conservative on many issues, I’ll take a stab…
I hate corporate welfare. I hate the government giving handouts or special incentives to companies. My preference is always to provide an overall environment that is business-friendly. Low (or no) taxes on companies that put employees to work. Low nuisance things – don’t get me wrong, some regulation about safety, vendors licenses and that sort of thing are necessary, but keeping those things as minimal as possible, so that businesses want to do business in our state is best. Combined reporting puts the state at a competitive disadvantage. I believe that you can’t tax corporations – you can only use them to help you tax their customers because taxation is just another cost of doing business and will be passed on. I also hate really high taxes so raising taxes to give to a company that makes millions…well it sucks. High taxes are a drain on the economy.
With all that said, you know what? In the real world, sometimes you gotta swallow a bitter pill to make you better. Whether you like it or not, it’s never been easier for a company to pick up and move. If your option is to give a company some financial incentives or they’ll move, in many cases you have to just suck it up and do it. If the benefit of the company overall – mostly the salaries it pays, keeping people employed, keeping dozens of other businesses working, etc – is greater than what it costs you to keep them/bring them here you do it. In the case of Mercury – considering the property taxes alone are around $600,000 a year, it won’t take long to recover the whatever they’re giving Merc.
In many cases, it’s not so crystal clear. But getting overly emotional or thinking “that’s not fair” is just not productive. That’s what children say. Adults realize things aren’t always fair, that sometimes they need to do things they don’t like. In the real world, the bottom line, is it’s simply a matter of ROI.
Yes, sometimes you do have to suck it up. Is this one of those times? Not in my opinion. The unemployment rate for the county is, I think,4.0%…not 9 or 10%. What are the driving factors for this package? None. This is a new CEO playing up the fears of job loss with an exagerrated economic impact report that is greater than the company’s payroll and the goods and services MM buys locally plus setting up two states to vie for future work.
Can you explain why this company is THE ONE that FDL county should suck it up for? The industry is in the tank with sales off over 50%. This is not a good industry where a few bucks will make them competitive again in a good economy. This is keeping a sick company on the dole and making everyone else pay for it.
That is the way I see it now.
The first point will have to be one we agree to disagree on. As well, I know you have problems with the economic impact report. But should remember that report did not come from Mercury but was a report the county paid for – done by researchers Economic Modeling Specialists and the Wisconsin Department of Workforce Development. I won’t dispute that Mercury used a bad economy and consolidating the two locations into one to help get them a better deal.
Yes, I messed up the unemployment figures. Sorry for the error. It was city-data for 2004 and I did not catch that.
So a $50M county loan to retain 500 jobs (maybe 850, maybe 1,850, depending upon the article)and to retain $600,000 in property taxes. Plus the state largesse will be on top of that.
I wonder what the reaction will be if the loan is used as a retirement incentive to shed more Fond Du Lac jobs from MM to “right size” the organization. Especially those higher paid employees that will leave the company for an incentive and only the lower paid jobs will remain with a smaller workforce. Appears to me that the county will have enabled what the union leaders were trying to avoid, namely, the replacement of higher paid workers for lower paid ones.
I think this new president at MM is very savvy and I will go out on a limb and say that the net result in two years will be job reductions at MM along with all of the union-approved lowered pay scales. In the end the taxpayers in the county will bear the cost of MMs transition. The president will move back to corporate for a larger division in the parent company. If he is really savvy, and I think he might be, he will use the loan to buyout weak competitors and pledge to move the operations to Fond du Lac. The operations to move will consist of a handful of employees, a product that will not be built in Fond Du Lac, and a larger share of a sales pie. All paid for by a county sales tax.
I am such a cynic. Must be the corporate experience in me.
I hope the county comes out ahead but my instincts tell me they will not.
But as the details of the package show the $50 million is the maximum and the amount is determined by numbers of employees kept, added or cut. So they aren’t getting $50 million for 500.
No need to wonder – the info from the county explicitly states that is one of approved uses of the money: “The loan proceeds are to be used for new engine development; the relocation of some of the Stillwater Oklahoma manufacturing positions to Fond du Lac; and a retirement incentive payment to IAM workers.” I have no idea how binding those restrictions are, but have no reason believe they won’t be honored. On it’s face, it would seem that your speculation that the tax money will be used on a spending spree is off the mark.
Someone once said something like:’You have bested my arguments but not my belief.’
I congratulate you on your rebuttal and stand firm on my belief that this will not be a positive for FDL or the union.
Well it could be that either the terms of the county’s package provide wiggle room or Merc could just outright not honor their end of things. I just don’t think it will – not out of any larger “do the right thing” principles of the company, but that the repercussions for doing so would be a bigger problem.
We can have this same go ’round all over when we find out what the state’s package is. Could be the state is just handing over a dump truck full of money for all I know. My guess is that the debate over the state package will be much more…interesting – more heated and a lot more gray. But when I look at the county package, I just don’t see much controversy. It’s the same sort of package municipalities provide to businesses all the time – a low interest loan – only with more strings on the company than normal.
Zack would’nt you agree to A half-cent to keep your job I bet the people in Fondy do hell i’d pay alot more i’ve been out of work since Nov 08 the taxes i payed to the union local 344 are much more than that about twenty five hundred A year no i dont like it but i’ll pay and pay and pay
ray, the union already caved in to Mercury Marine’s demands for pay and benefit cuts, so why should Fond Du Lac County be forced to give Mercury Marine corporate welfare on top of that?